The need for skilled manufacturing workers is so acute, the CEO of Moraine’s Rack Processing Co. Inc. struck a deal last year nearly unheard of in the industry.
Faced with the possibility of losing a customer because he didn’t have enough workers to fulfill an order, he borrowed five employees from another local company for about six weeks.
“I think most of us are struggling,” said Jim Bowman, vice president and chief operating officer of Moraine’s Rack Processing Co. Inc. To secure the workers, Bowman had to promise not to hire them permanently.
Manufacturers are in a crisis, but it’s not the same problem that resulted in thousands of jobs to disappear in a downsizing that threatened the economic health of a state once known for its crowded factory floors.
Not all the lost jobs have come back, but a lot of them have and companies like Rack Processing say they no longer have a shortage of jobs. They have a shortage of qualified workers.
The need is acutely felt and widespread: The Dayton area and West Central Ohio are home to about 2,500 manufacturers trying to fill some 3,400 new positions every year, said Jon Foley, a trustee of the Dayton Region Manufacturers Association, which has members in 14 counties.
From 2015 to 2025, the DRMA expects an average of 3,301 annual manufacturing openings in its service area.
Some put that number higher. Steve Staub, co-owner of Harrison Twp.’s Staub Manufacturing Solutions, said area manufacturing openings are closer to 4,000.
RELATED: Dayton manufacturers ID top concerns
Manufacturers are facing a trio of problems simultaneously: Jobs today are more technically demanding; manufacturing workers tend to be older, with many retiring; and insufficient numbers of young people are considering manufacturing as a lifelong career.
“It’s the perfect storm that we’re having,” said Scot McLemore, manager of talent acquisition and deployment for Honda North America.
In March, manufacturers posted approximately 394,000 job openings nationally, according to the U.S. Bureau of Labor Statistics, a 246 percent increase since the Great Recession ended.
A January 2017 report from business consultant Deloitte says the problem will likely get worse: It anticipates a shortage of two million manufacturing workers in the next decade.
“It’s really more than one problem,” said Eric Burkland, president of the Ohio Manufacturers Association.
Last year, one of Rack Processing’s newest customers gave the company an ultimatum: Produce a set number of racks weekly or lose our business, Bowman recalled.
“It was significant enough that we needed like 30 percent more employees immediately,” he said.
The pressure forced Bowman to strike a “very” unusual deal. Rack Processing temporarily borrowed five workers from another local company for about six weeks.
That arrangement barely gave the company enough time to permanently hire other workers.
“I think it wouldn’t have worked if there had not been a lot of trust between the two contacts,” Bowman said.
Staub recalled reviewing a project for an aerospace customer recently. While reviewing job requirements, that customer’s message to Staub was simple.
“They flat out told us that if we can’t meet their requirements, we were not going to get the job,” Staub said. “It’s concerning.”
‘Quite a challenge’
Each year, the area manufacturing association surveys members on their top concerns. And each year, workforce issues rise to the top of that list, weightier than taxes, health care costs and trade issues.
“There is no more denial,” Burkland said. “There is an awareness now that we have to change how we manage career pipelines and how we recruit talent.”
Local manufacturing growth is happening in a region that hasn’t experienced explosive population growth. Ohio as a state has grown slower than 38 other states, growing by only about 9,000 people from July 1, 2015 to July 1, 2016 — an increase of just .07 percent. The Census put the city of Dayton’s population in 2015 as 140,599, down more than 1,000 from its 2010 population of 141,761.
It’s a common lament among most if not all employers: Good help is hard to find.
But it’s a constantly expressed refrain among manufacturers.
“Manufacturers seem to be talking about it as much if not more than others,” said Phil Parker, president and chief executive of the Dayton Area Chamber of Commerce and a member of a state committee on workforce issues, the governor’s Executive Workforce Board.
The problem is so bad locally, DRMA is about to launch a $1 million fund-raising campaign to try to address the problem, hoping to spark greater cooperation between companies and educators.
One reason for the struggle is a phenomenon most people actually welcome: Big manufacturers are taking root in the Miami Valley — and they’re hiring.
In recent years, Fuyao Glass America has hired more than 1,500 production workers in Moraine, with about 500 more managers and supervisors. Diesel truck engine producer DMAX, also in Moraine, has been on a hiring spree. A new company, Canadian auto parts manufacturer Hematite, is about to break ground for its own plant in Englewood, where 100 people will work.
Medical equipment manufacturers NuVasive in West Carrollton and Norwood Medical in Dayton, among others, seem to have an endless appetite for workers.
“Those companies are usually the glamour companies, and they do a great job and they have deeper pockets to do some of that marketing and advertising to get workers,” Bowman said.
The problem: Most manufacturers are small, family-owned businesses with maybe 50 or fewer employees, Bowman said. The retirement of even a few workers can be a “big number” for those companies, he said.
And manufacturing workers today tend to be older, according to the Manufacturing Institute, citing federal labor data. In 2000, the median age of the manufacturing workforce — 40.5 — was 1.1 years above the median age of the total non-farm workforce. By 2012, this gap doubled, with the median age in manufacturing being 44.7 years, above the 42.3 years for the total non-farm workforce, the institute said.
“All of those employees are now phasing themselves out, they’re retiring,” DRMA’s Foley said. “There’s a big gap in there that we’re trying to fill.”
“As the older generation moves out, the younger generation isn’t moving into those type of careers,” Bowman said.
‘Certain stigmas and misperceptions’
Ryan Burgess, director of Gov. John Kasich’s Office of Workforce Transformation, knows it’s a problem that keeps company owners up at night.
“When you talk to business owners, the No. 1 issue you’re probably going to hear is workforce,” Burgess said. “That is a pretty consistent feedback across the state.”
Too often, the field is associated with dirty, dead-end jobs. But that’s an outdated view, advocates say.
“When you look at certain industries, especially around the skilled trades, are there certain stigmas and misperceptions of the jobs out there?” Burgess said. “I think yeah.”
Manufacturing advocates struggle against that, arguing that today manufacturing is clean, technical and a pathway to a good life.
“They don’t see behind the scenes of manufacturing,” Bowman said. “They don’t know that there’s a lot of good, high-tech, math- and science-oriented type jobs that are out there.”
“If we can better align businesses and education, we can start to address some of those stereotypes,” Burgess said.
The Bureau of Labor Statistics put average hourly earnings for non-supervisory production workers in April 2017 at $20.72, with an average of just under 42 hours per week.
That’s above the average hourly wage of $20.39 in April 2016, which itself is above the average of $19.80 in April 2015.
In fact, the wage has steadily risen since an average of $17.20 in April 2007, a decade ago, according to the BLS.
Skills hard and soft
It’s not just “hard” skills such as machining or programming computer controlled machines that manufacturers need in prospective employees. “Soft” skills also bedevil employers. “Skills” such as simply coming to work on time, staying at work — and being able to pass a drug test.
“They still have many people who are not, repeat not, passing drug tests,” Parker said.
In the manufacturing jobs of old, people didn’t require a lot of specialized training.
“I’m trying to get them (state leaders) to understand, we need to put more resources into these areas, into the high schools,” Parker said.
“High school, college-age — it needs to start younger than that,” said Brian Ault, industrial sales manager for Bruns General Contracting. “I think it needs to start at the elementary level. We need to at least talk about manufacturing at that age.”
Honda invites middle-school and high-school students into its Central Ohio plants for field trips and manufacturing days, taking the opportunity to showcase the jobs as clean, well-paying and anchored in math and science, Honda’s McLemore said.
“We felt we needed to change the conversation,” he said.
In all, Honda has training partnerships with six Ohio colleges — including Sinclair Community College, Clark State, Edison State, among others— and three Central Ohio high schools.
Filling openings will also require reaching older adults, men and women in lower-skilled work who want to improve their lives, Burkland and others said.
Education, increased awareness and better awareness can all help. But no one believes the problem can be solved easily or quickly. However, Burkland, for his part, says he is optimistic.
“This is the No. 1 issue by far,” he said. “If we don’t have the talent in our workplaces, then we don’t businesses to operate.”
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